My company and what’s next
For many years I have been building my business, for my family, for my children, for me, because it fulfils me.
And today? One virus, several unprecedented decisions by the governments to limit global movement and the life as we know it, and the growing economy and many businesses are suddenly in chaos, heading for recession.
Discontinued production, missing supplies, sales and logistics are stalling, people at home. Operating money is gradually declining. Everyone is waiting for the banks and the government, to see what relief and rescue packages they prepare.
Experience suggests that our governments will not do much. Limited resources and a large group of applicants do not go together. We are the ones who are expected to show flexibility and provide a solution and, in the current situation, perhaps cause miracles.
I have cash reserves – I’m fine
When a company has reserves in the form of capital in alternative assets, it can be considered to be monetized for business operating purposes. This, of course, provided I find a serious buyer at a serious price and such injections will be sufficient to save the company.
Today, however, I do not know how long this situation will last, a month, three, a half years, or longer? We do not know how severe the decline in sales is going to be. An injection from my reserve may resolve a month, two, or even three. Then maybe not anymore.
What about banks and investors
It is clear that the economy and our companies will need additional capital. We can’t do it ourselves, and we shouldn’t. We have banks, investors and international institutions that have access to capital and offer assistance. However, it will not be universal and selfless. It will help to resolve a specific situation, which will be assessed by specific bank officials and analysts, business as usual for many. Maybe a better maturity for new loans, maybe less demands for minimum equity requirements and maybe a friendlier view on credit criteria, or financial performance. Maybe. Maybe not.
In all respects, capital providers expect you to know what you want to do with money, expect a business plan, expect a strategic decision, and expect a detailed monthly rescue plan and their variants. And they also expect you to return the money. All, together with interest or return on invested capital, if you are considering an equity investor. And this demands a solid plan.
Consultants
In fact, many don’t usually seek consultants. Their advice, even sometimes interesting, does not always correspond to the reality or capabilities of our organizations.
But today’s situation is different. Today it is not about the usual decision-making in the usual and stable conditions. Today it is a crisis management that has other attributes than normal management. Today, it is about quick and difficult decisions with a potentially negative impact on many people, under the fast changing situation that is difficult to predict. Being able to prepare plans and clarify solutions for banks and investors alone with your own team, without consulting with professionals on expert modelling of cash flow variants, on crisis solutions and with a perfect knowledge of the requirements of banks and investors, can be the way to hell. The Independent experts have something that business owners don’t. A personally unbiased attitude and helicopter view on the issues at hand, an experience from similar situations, and a trained ability to work with data, facts and their interpretation. And they work faster.
We at MYGIDE are experts in financial modelling, crisis solutions and risk quantification providing services to SMEs.
We tailor our assignments for our client’s needs, that best match the current situation.
- Basis of rescue measures
- Back to stability
- Strategic plan
- Outlook Cash flow
- Capital raising opportunities
- Sales or acquisitions (necessity or opportunity)